BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    SB 1128


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          Date of Hearing:  June 20, 2016


                        ASSEMBLY COMMITTEE ON TRANSPORTATION


                                 Jim Frazier, Chair


          SB  
          1128 (Glazer) - As Introduced February 17, 2016


          SENATE VOTE:  37-0


          SUBJECT:  Commute benefit policies


          SUMMARY:  Removes the sunset for the Metropolitan Transportation  
          Commission (MTC) and the Bay Area Air Quality Management  
          District (BAAQMD)-administered San Francisco Bay Area commuter  
          benefits program that requires certain employers to provide  
          commuter benefit options to their employees.  Specifically, this  
          bill:  


          1)Authorizes MTC and BAAQMD to continue their commute benefits  
            program on a permanent basis by deleting the sunset date of  
            January 1, 2017.



          2)Deletes bicycle commuting from the pre-tax option of the  
            program to conform to federal law, and adds bicycle commuting  
            to the employer-paid benefit option of the program allowing an  
            employer to offer a bicycle commuting subsidy to employees.  










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          3)Deletes the requirement that MTC and BAAQMD issue a report to  
            the Legislature.

          EXISTING LAW:  


          1)Establishes BAAQMD with the primary responsibility for  
            controlling stationary sources of air pollution within the  
            nine counties that surround San Francisco Bay, including  
            Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo,  
            Santa Clara, southwestern Solano, and southern Sonoma  
            counties.  
          2)Establishes MTC, which serves as the Metropolitan Planning  
            Organization (MPO) and the regional transportation planning  
            agency for the San Francisco Bay Area.  MTC is responsible for  
            transportation planning, coordinating, and allocating funds  
            from certain state and federal highway and transit programs.  

          3)Allows MTC and the BAAQMD, until January 1, 2017, to jointly  
            adopt a commute benefit ordinance that requires covered  
            employers, as defined, to offer one of the following options  
            to their covered employees, as defined:  
             
             a)   A pretax option consistent with federal law allowing  
               covered employees to exclude from taxable wages employee  
               transit pass, vanpool, or bicycle commuting costs;  

             b)   An employer-paid benefit whereby the covered employer  
               offers a subsidy to offset the transit or vanpool commuting  
               costs;

             c)   Transportation furnished by the covered employer at no  
               or low cost to the covered employee in a vanpool, bus, or  
               multi-passenger vehicle operated by or for the employer;  
               and,

             d)   An alternative program approved by MTC and BAAQMD that  
               provides similar the same benefits as the other options.  








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          1)Requires that the commute benefit ordinance allow covered  
            employers at least six months to comply after adoption of the  
            ordinance.  

          2)Establishes the role of transportation management associations  
            in the place of covered employers in complying with the  
            ordinance.  

          3)Requires the commute benefit ordinance to specify how the  
            implementing agencies will inform covered employers how  
            compliance will be demonstrated, the procedures for proposing  
            and criteria used to evaluate an alternative commuter benefit,  
            and any consequences for non-compliance.  

          4)Requires MTC or the BAAQMD, on or before July 1, 2016, if they  
            implement a commute benefit ordinance, to jointly submit a  
            report to the transportation policy committees of the  
            Legislature on the effectiveness of the ordinance and sets  
            requirements for that report.  

          5)Prohibits the use of MTC's federal planning funds to be used  
            for the implementation and enforcement of the benefit commute  
            ordinance.  

          6)Defines "covered employer" to mean any employer for which an  
            average of 50 or more employees perform work for compensation  
            on a full-time basis within the area where a commute benefit  
            ordinance is adopted.  

          7)Defines "covered employee" to mean an employee who performed  
            at least an average of 20 hours of work per week within the  
            previous calendar month within the area where the ordinance is  
            adopted.  

          8)Enacts the Global Warming Act of 2006 [AB 32 (Núñez), Chapter  
            488, Statutes of 2006] that requires the California Air  
            Resources Board (ARB) to adopt a statewide greenhouse gas  
            (GHG) emissions limit equivalent to the statewide greenhouse  








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            gas emissions levels in 1990 to be achieved by 2020.





          9)Enacts SB 375 (Steinberg), Chapter 728, Statutes of 2008, that  
            requires the ARB to provide each region of the state with GHG  
            emission reduction targets for the automobile and light truck  
            sector.  Requires a Regional Transportation Plan (RTP) to  
            include a Sustainable Communities Strategies (SCS) as part of  
            the regional transportation plan to achieve the targets for  
            GHG reduction.

          FISCAL EFFECT:  This bill is keyed non-fiscal by the Legislative  
          Counsel.


          COMMENTS:  In 2009, three Bay Area cities, San Francisco,  
          Berkeley, and Richmond, adopted local ordinances requiring  
          employers to offer their employees commuter benefits consistent  
          with federal commuter tax benefits, such as allowing employees  
          to pay their transit or vanpool fare using pre-tax dollars.   
          Based on the success of these programs, in 2012 MTC and BAAQMD  
          sought authorization from the Legislature to adopt an ordinance  
          that would apply to all counties in the region.  SB 1339 (Yee),  
          Chapter 871, Statutes of 2012, authorized the two agencies to  
          develop a pilot ordinance with a January 1, 2017, sunset date.   
          SB 1128 would delete this sunset date, thereby extending the  
          authorization for the program permanently.  


          According to the author, the goal of the commute benefit program  
          is to promote the use of transit and other alternative commute  
          modes in order to reduce single-occupant vehicle commute trips,  
          traffic congestion, and GHG emissions and other air pollutants  
          from motor vehicles.  The program seeks to achieve these  
          objectives by expanding the number of employers who provide  
          commuter benefits to their employees.








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          In a recent report to the Legislature assessing the pilot, MTC  
          and BAAQMD address the implementation of the program, costs  
          savings to employers and employees, and overall reductions in  
          commuter car trips and GHGs.  


          Implementation:  To implement the program, the agencies did  
          extensive outreach to business groups to work with employers to  
          determine the right option for their employees.  A total of  
          3,910 employers in the Bay Area are registered and participating  
          in the program, with 55% offering a commuter benefit to their  
          employees for the first time.  This translates to roughly  
          472,000 employees who are eligible for a commuter benefit, of  
          which 205,000 are utilizing it.  Additionally, of those  
          employees using the program, 44,400 would not travel by an  
          alternative mode of transportation if their employer did not  
          provide a commuter benefit.  However, the report estimates that  
          the program may apply to as many as 10,000 Bay Area employers.  
          Although under current law, BAAQMD has the authority to enact  
          penalties for non-compliance, MTC and BAAQMD plan to continue to  
          emphasize compliance assistance over enforcement by publicizing  
          and conducting outreach activities to increase participation.  


          Savings:  The pilot program offers employers four options of  
          commuter benefit for their employees.  The pre-tax option, which  
          allows employees to exclude their transit or vanpool expenses  
          from taxable income for up to $255 per month, was the most  
          widely implemented with 82% of employers offering this option.   
          The option is easy to administer and also saves money for the  
          employer and the employee.  Specifically, an employer could  
          reduce their payroll taxes by as much as $238 per employee per  
          year.  Employees in the 25% federal income tax bracket and the  
          6.5% state income tax bracket can save up to $965 per year.  


          Environmental benefits:  With the passage of SB 375 (Steinberg),  








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          Chapter 728, Statutes of 2008, the state's MPOs are required to  
          develop SCSs to reduce GHGs by a certain amount determined by  
          the ARB.  Adopting innovative strategies to increase mode shift  
          is paramount to meeting the targets.  In the first year of the  
          program 4.3 million fewer vehicle trips were made as a result of  
          the benefit, reducing vehicle miles traveled by 86 million  
          miles.  This translates to a reduction of nearly 36,000 tons of  
          GHGs or 2.7% of the Bay Area's GHG reduction target.  


          In writing in support of SB 1128, the California Transit  
          Association noted that "this bill will benefit employers and the  
          employees through lower payroll and income taxes, and reduced  
          tailpipe emissions and traffic congestion.  Moreover, in light  
          of ongoing issues related to aging and deficient transportation  
          infrastructure and increasing costs of living in the Bay Area,  
          this bill is a small step the Legislature can take to lower the  
          cost of commuting and advance California's climate protection  
          goals, all without raising taxes or otherwise harming economic  
          growth."     





          Previous legislation:  SB 1339 (Yee) Chapter 871, Statutes of  
          2012, authorized a pilot program for MTC and BAAQMD to establish  
          ordinance requiring certain Bay Area employers to offer commute  
          benefits to employees. 


          REGISTERED SUPPORT / OPPOSITION:




          Support










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          Bay Area Air Quality Management District (Sponsor) 


          Metropolitan Transportation Commission (Sponsor)


          Alameda-Contra Costa Transit District


          Alameda County Transportation Commission


          California Association for Coordinated Transportation 


          California Transit Association


          City and County of San Francisco


          Coalition for Clean Air


          Golden Gate Bridge, Highway, and Transportation District


          Lyft


          Napa Valley Transportation Authority


          National Resources Defense Council


          Peninsula Corridor Joint Powers Authority










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          Regional Asthma Management and Prevention


          San Francisco Bay Area Rapid Transit District


          San Francisco Chamber of Commerce


          San Francisco Municipal Transportation Agency


          San Mateo County Transportation Authority


          San Mateo County Transit District


          Santa Clara County Board of Supervisors 


          Solano Transportation Authority


          SPUR




          Opposition


          None on file




          Analysis Prepared by:Melissa White / TRANS. / (916)  
          319-2093








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